updated 03:00 pm EDT, Wed September 12, 2007

Palm OKs Partial Takeover

Palm's shareholders today greenlighted its recent plan for partial buyout of the company by private equity firm Elevation Partners, giving the company a 25 percent stake in the smartphone maker for about $325 million. Palm in return would pay about $9 per share, or $940 million, to shareholders to compensate for their reduced influence on the company. The deal would sharpen the company's performance through "renewed innovation and focused execution," according to Palm chief Ed Colligan. The company has recently been struggling to upgrade its lineup under current conditions, having just canceled the Foleo smartphone companion and running all of its non-Windows smartphones on aging PalmOS 5 software.

The move also brings two former Apple executives into the company's business. Jon Rubinstein, the former head of Apple's iPod division, has confirmed his place as executive chairman of the company's Board of Directors. Rubinstein will offer his own advice and help attract a fresh round of designers and engineers to "change the dynamics of the company," according to Colligan. Rubinstein is also known for leading the team that ultimately created the original iMac, which reversed Apple's sagging fortunes in the late 1990s.

Another Apple member will join the Board through Elevation Partners, the company noted. The Mac maker's former chief financial officer, Fred Anderson, will join Bay Area investor Roger McNamee as part of Palm's directing team and influence the company's financial direction. Anderson left Apple in late 2006 amidst an SEC investigation which questioned the company's approach to backdating stock options and which ultimately led to Anderson agreeing to a monetary settlement for his alleged role.